The market value of a leasehold property in Upton is impacted by how many years the lease has remaining. If it is near to or less than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension before purchasing. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that formalities can be finalised in advance of the 80 year threshold. Current legislation entitles Upton qualifying lessees to an additional term of 90 years on top of the unexpired term, at a nominal rent (zero ground rent). The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Upton leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Reuben, started to get close to the 80-year threshold with the lease on his leasehold apartment in Upton. In buying his home twenty years ago, the lease term was of no significance. by good luck, he noticed he needed to take action soon on a lease extension. Reuben arranged for a lease extension just under the wire in March. Reuben and the freeholder via the managing agents ultimately settled on a premium of £6,000 . If the lease had fallen lower than 80 years, the premium would have become more costly by at least £925.
In 2009 we were contacted by Dr B Morgan who, having completed a first floor flat in Upton in August 2002. The dilemma was if we could estimate the premium could be for a 90 year lease extension. Comparable flats in Upton with 100 year plus lease were worth £254,200. The average ground rent payable was £60 invoiced per annum. The lease ended on 26 November 2076. Given that there were 51 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £43,700 and £50,600 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Upton residence is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case related to 13 flats. The unexpired term was 76 years.